Supreme Court: "Ordinary Wages Must Be Calculated Based on Actual Working Hours"

[Asia Economy Reporter Song Seung-yoon] The Supreme Court has issued its first ruling stating that extended and night work hours must be counted as actual working hours when calculating the hourly ordinary wage.

Previous precedents applied the premium rate (at least 150%) used for calculating extended and night work allowances to the calculation of hours as well. Therefore, inflating the working hours by that amount was allowed, but the new precedent views this as disadvantageous to workers.

On the 22nd, the Supreme Court en banc overturned the lower court ruling that partially ruled in favor of plaintiffs A and others, who had worked as bus drivers and filed a wage lawsuit against company B, and remanded the case to the Daejeon High Court.

The court stated, "The agreed working hours exceeding the standard working hours must be calculated based on the actual number of hours the worker provided labor," and "the premium rate used for calculating additional allowances cannot be applied to determine the number of extended and night work hours."

A and others, who worked as bus drivers for company B and retired, filed a lawsuit claiming that "only the basic hourly wage and daily wage were used to calculate the hourly ordinary wage, and fixed wages such as seniority allowance and duty allowance were not included in the ordinary wage, so severance pay and others must be recalculated."

The previous precedent, announced in 2012, calculated "one hour of night or extended work" as "1.5 hours" when calculating the ordinary wage.

Under the Labor Standards Act, when working at night (10 p.m. to 6 a.m.), extended hours, or holidays, a premium of at least 50% must be added to the ordinary wage, and this regulation had been applied to working hours as well.

However, the Supreme Court ruled, "There is no legal basis to consider the premium rate used for calculating additional allowances when determining the number of working hours."

It added, "According to previous precedents, work exceeding the standard working hours is effectively calculated as 'less' than its actual value," and "this contradicts the purpose of the Labor Standards Act, which aims to protect workers by requiring payment of premium wages for extended and night work."